Working households - Living costs and lifestyles - what is essential?

Nebulous2

RR4353 wrote: »

Thanks again for the discussion

QUESTION 5
How important is being, or becoming, a homeowner?...and why?

I don't think we even thought about it. It was just expected. As soon as we both had completed training we bought a flat.

When we had a child we moved to a cheaper rural area to buy a house and then as finances improved moved back to another house in town.

There was a presumption of home ownership.

getmore4less

RR4353 wrote: »

Thanks enthusiasticsaver!

You have 'Debt free, mortgage free, early retiree, living the dream' on your posts - what advice would you give to others striving to achieve this?

In the old days it was fairly standard to work around 40 years 20-60 then retire.

There is a great post from someone on another site(that I can't find) that has the retire in 20 model by live on 1/2 save 1/2

I felt this was a little tight for most people even though the investment return goals were not too outrageous it required no hick ups along the way

I modified this to a slightly different model simplified it is

live off 1/3, save 1/3, buy a property with 1/3.

This can get you close to having a big enough pot to retire mortgage free in 25 years.

If you start at 30, settled into a career on OK money, retire at 55 is very achievable and there should be a bit of a head start anyway in the first 10 years(20-30).

Kids mess this up so don't have them or change the model to 1/4 with kids getting the 4th quarter.

getmore4less

RR4353 wrote: »

Thanks again for the discussion

QUESTION 5
How important is being, or becoming, a homeowner?...and why?

Cheaper than(lifetime) renting unless you are getting subsidised accommodation.

stingey

RR4353 wrote: »

Thanks again for the discussion

QUESTION 5
How important is being, or becoming, a homeowner?...and why?

There's expectation and pressure in society to make it important. As if 'you've made it' if you 'own your own home'.

It's not overly important to me for the following reasons:

The mortgage provider owns the house until the mortgage is repaid. It's not 'your's'. This is up to 30 years of your life. If you stop making repayments the mortgage provider evicts you from 'your home', how then do you own it?

Those in a leasehold property (especially new builds) are having to pay extortionate ground rents for the property to sit on and fees for making changes to 'their' property.

I've seen people close to me work hard, sacrifice through their lives to 'own their own home' repay the mortgage, then die within a few years or have to sell the property due to outside circumstances.

If you live in a communal block the factor can bill you for investment works and changes to the exterior of 'your home' even if you object. They will override you, then bill you for it.

Maybe years ago it would be important, jobs were more secure. Today it's a very risky investment, 30 years is a long time for something not to go wrong. I also think attitudes will change, we seem to be the only European country where being a homeowner is a must. Renting properties are more common.

[Deleted User]

RR4353 wrote: »

Thank you - yes geographical issues are certainly an issue, if you (or anyone else with similar issues) would like to add to this that would be appreciated - in particular highlighting any additional living costs incurred by living in rural/remote areas but balanced with any gains/positives and reasons for choosing to live away 'hustle and bustle' :-)

I also live in a rural area.

Costs - we do not have gas in the village (and never will as too far away from the main gas line). So we use oil for heating and hot water. The costs can vary a lot depending on global events affecting oil prices.

Also, no public transport so we need two cars. Again the cost of petrol has a big impact on budget. My husband works in a town where they are planning to implement the 'toxin tax' so no idea what we will do then as it is not affordable. Also, cars tend to need more repair work due to navigating bumpy country lanes and driving up grass vergers to get past tractors and combines.

Everything is more expensive. My nearest town is 7.5 miles away so just to get there and back costs about £3-4 in petrol before even buying anything.

It is very cold in winter so extra costs for heating too.

The benefits are larger garden, peace and quiet, wildlife (we get 34 species of birds in the garden and I have been watching two sparrowhawks chicks this morning too). About 30 paces from my front door I can be walking in fields, good community.

Technology has made a massive difference to us over the last few years. I am a self-employed, freelancer working from home (well, watching the sparrowhawks today anyway!). Even a few years ago I could not have done this due to poor rural broadband speeds.

For just over a year we have been able to stream films and this has made a massive difference. Nearest cinema is about a 1 and 1/2 to 1 hour and 40 mins round trip away.

Also, we more or less buy everything online too. Cheaper than driving and paying for petrol. This includes food, clothing, gardening items including plants, presents, holidays etc.

Tech also allows us to keep in-touch with family and friends and managing our finances. They bank in the local town shut about 2 months ago.

So for us it is an essential part of our living costs.

RR4353

Thanks everyone, the views on housing are really interesting. I could go on and on asking more and more questions, you've all been so helpful and detailed in your responses

Living costs is such a broad area and it would be impossible for me to cover everything because my assignment is just a small-scale piece of research.

So I'd like to thank you all and leave one last question which I'll leave open for a week or so but do also feel free to return to any of the previous discussion and answer questions you may have missed or add to the responses of others.

QUESTION 6
Is there anything that I have not asked about or that has not been brought up so far that you feel is particularly important/of concern in relation to living costs in the UK today, either on a personal level or more widely?

Thanks again

Owain_Moneysaver

RR4353 wrote: »

QUESTION 6
Is there anything that I have not asked about or that has not been brought up so far that you feel is particularly important/of concern in relation to living costs in the UK today, either on a personal level or more widely?

Low interest rates and high inflation rates. I know they're good for people paying mortgages, including buy-to-lets which feeds through to rents charged, but they are such a disincentive to savers and affect income on asset-rich income-poor (which means a lot of older people).

Not having savings, and irresponsible borrowing because credit is too cheap and easily available, actually ends up costing people a lot more.

1991-93 BOE base rate fell from 10% to 5%, from 2008-9 from 5% to 0.5%.

And food is getting expensive again. This week I'm trying to have a brunch about 10 am rather than both breakfast and lunch.

CakeCrusader

Broadband - I work from home so it's essential (no broadband means I can't work), I order my groceries online too (I don't drive and it's difficult to carry bags of groceries home).



Water bill - the local water company slap you with a CCJ if you pay too late.



Dental plan



Bus card - prices only every go up, but I'm stuck in between two cities and there's only one bus company which travels to them both so I have little choice.


My parents lived on benefits and I can remember hiding from X,Y and Z when I was a child because they didn't have the money to pay them. I was always being sent to borrow cash from my father's brother, and Friday night's visitor was the Provident lady (they made a mint from my father). We pretty much lived on chips as a bag of potatoes was cheap. I managed to get into University and I earn a good wage now. I have a couple of credit cards but I manage them well so I'm a lot better off then my parents were. I do think we've become more materialistic as time has gone on, which is sad really. I think bill costs and food prices (and rent!) are far too high though. Food's tricky, there's a lot more choice in the supermarket and we're made to feel as though we should buy 4 different types of what's essentially the same product, or that we should buy fruit and veg which is out of season here and imported. There's too much choice, which ramps up the food bill. I remember my water bill in 1999 being £25 a year, now it's £25 a month. We're working harder to cover the ever increasing bills, it seems.

katejo

RR4353 wrote: »

Thanks again everyone

Feel free to keep answering my previous questions above if you're just joining the discussion now...I will number them more clearly to help me keep track of who is answering what - please just note which question you're referring to when commenting.

So.....my next topic: personal credit (credit cards, store cards, catalogues, HP, paying monthly for things like insurance, car tax, etc. - anything where you pay monthly/defer payment, usually incurring interest, rather than outright for goods/services) -

QUESTION 3
Does credit help or hinder you (or family/friends) to improve your standard of living?....how?

It makes absolutely no difference to my standard of living. I use a credit card as a method of payment but only buy products for which I already have the money. i never pay a penny of interest but benefit from the added consumer protection. If I want a larger purchase, i save for it first.

katejo

RR4353 wrote: »

Thanks again for the discussion

QUESTION 5
How important is being, or becoming, a homeowner?...and why?

For me very important and i am glad that I managed to do it in the early 90's when I could. Then my £14K salary allowed me to get a 1 bedroom flat. Later I sold it and got a small house. If I had not done so then, I couldn't now. My public sector salary has been pretty frozen since about 2008 and I could not buy a place as a first time buyer now. I could also not afford to rent even a 1 bedroom flat because it would take about 75% of my take home pay. However I have taken advantage of low interest rates on my mortgage and I am close to paying it off (about 3 years to go).
This means that I can hopefully afford to retire before I reach 65 and maintain a reasonable standard of living due to no mortgage/rent costs.